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The GoodEasy to install and easy on the eyes, the Nest Learning Thermostat learns your heating and cooling preferences over time, so you don't have to program it. Wi-Fi networking and tasteful apps let you control and monitor your Nest from afar. Saves money ... eventually.

The BadAt $250, the Nest is so very expensive, and large homes may need more than one.

The Bottom LineThe second generation of the energy-saving Nest Learning Thermostat puts this device even further ahead of the (nearly nonexistent) competition.

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Within a week of installing the first-generation Nest Learning Thermostat in my house last spring, I decided to buy my review unit rather than return it to the company. When a tech journalist pays $250 for a thermostat, you know it's a special kind of thermostat. Fast-forward seven months, and I'm still a devotee, so I was excited to get my hands on the second generation of the Nest Learning Thermostat.

Editors' note, April 29, 2013:I've updated this review since its original publication date to reflect the Nest 3.5 software update and feature additions. I've also added my year-over-year energy usage results after having Nest installed for long enough to test its conservation claims.

The newer Nest works off the same premise: because so few homeowners actually set up programmable thermostats, the Nest saves money and time by learning your household patterns and programming itself. The physical design of the second-gen device remains sleek and elegant, but Nest Labs took customer feedback to heart, making some physical refinements and working out compatibility with a wider range of home heating and cooling systems. The changes are simple, but pleasing. I'll update this review to cover those changes, but much of my experience -- and review -- remains the same.

To cut to the chase: the Nest works. In the first few days, the thermostat I tested figured out that despite our many comings and goings, my family typically likes the house to be 68 degrees Fahrenheit during the day, and an energy-saving 64 degrees when we usually go to bed around 11 p.m. Over time during my first run, the Nest cleverly differentiated between our weekday and weekend patterns and automatically heated up later on weekend mornings and ran throughout the day when we are more often home. As with the first-generation device, the second-gen Nest Learning Thermostat is strikingly easy to install without professional help, and it looks lovely on the wall.

But the startling joy of the Nest thermostat comes from the side benefits of a networked thermostat and from the attention to detail the Nest team has paid to design. The first-generation Nest Learning Thermostat was the most beautiful, intuitive home automation device I'd seen, and the new version tops the old. Like the iOS and Android apps, each Nest's internal software continues to receive updates years after you purchase the device, so these informative apps improve continuously.

Version 3.5 of the software -- available automatically on older Nest devices and apps on April 29 -- serves up an energy-use dashboard that should make a conservationist out of anyone. Plus, I can pick up my smartphone and use it to turn my Nest thermostat up from bed when I wake up in the morning. Other thermostats from Honeywell and Ecobee allow for basic, app-based remote control, too, but none with the simplicity and self-teaching of the Nest.

Nest's design: More iPod than thermostat Nest Labs took the rectangular, button-littered digital thermostat and chucked it. Instead, the company took a page from the original iPod playbook (no surprise, since Nest was famously founded by former Apple engineers) and built the hockey-puck-size thermostat around a round screen. The entire housing, made of glass, plastic, and brushed aluminum, is a button and a scroll wheel combined. The second-generation device improves on the original by thinning the profile by 20 percent and making the entire housing one piece of stainless steel, so that it better reflects the colors of the wall behind it. All driving happens by rotating the entire thermostat and pushing to select. It's intuitive and satisfying to confirm choices with a subtle, muted clicking sound.

The second-generation Nest (left) is 20 percent slimmer than the first. More importantly, the bezel is a single, elegant piece of metal.
Lindsey Turrentine/CNET

The round screen is bright, cheerful, and easy to understand, with heating and cooling designated by both color and by number. A green leaf shows up when you're making a temperature choice that Nest considers energy-saving. My kids can't stop touching the thermostat to explore the menus, and they instantly understood how Nest works. (Which is a bit of a liability, since the Nest is theoretically learning from all their enthusiastic fiddling.) My only complaint here, and it's a small one, is that the round interface doesn't leave quite enough room for some words in the setup menus, which leaves them awkwardly cut off or hanging beyond the borders of the screen.

All the Nest setup happens on the device itself, which is gratifying if you're the kind of gadget hound who wants nothing more than to get your hands on the gear and get it working. I would like to be able to change some settings remotely via the app -- typing in a long Wi-Fi key by dialing the bezel can take a while -- but really, once you've installed the Nest, you won't need to touch it often. I now primarily control the Nest from the Nest apps installed on both my phone and my iPad. (More on those charming apps later.)

Nest's iPad app (and all the mobile apps) displays the weather via charming illustrations. This is what the Nest iOS app looked like during a rainstorm outside my house.

Nest thermostat features lurk within There's a lot going on inside the Nest Learning Thermostat, but you can't tell at first. Once you plug in the device and set the target temperatures, there's not much else to look at.

The Nest screen flickers on automatically whenever you walk by and learns from you every time you raise or lower the heat. After a couple of days, the Learning menu begins to show what the thermostat has picked up. It will set some initial schedule points (say, it will turn down automatically around bedtime) and will figure out how long it takes your heater or your air conditioning unit to reach a given target temperature based on past performance.

This target temperature calculation wasn't particularly meaningful in the first generation of the Nest. Read some Amazon reviews and you'll find -- especially for families living in extreme climates -- a lot of head scratching about why the Nest didn't use this feature to get a jump start on heating or cooling. Generation 2, however, makes the most of it.

Not only does the newer version work with a wider range of home heating and cooling systems (95 percent of the low-voltage market, according to Nest Labs' rep, now including two-stage AC units and three-stage heating systems), it now connects to emergency heating units and whole-home humidifiers. The Nest then uses the time-to-temp calculations to bring specific types of systems online when it's appropriate for that technology. Called System Match, the settings tell your Nest to make choices based on the type of heating and cooling units in your house. So, for instance, a radiant heating system that may take 30 minutes to raise the temperature 5 degrees in your home will come on well before your desired temperature change to make sure the house is comfortable exactly when you want it that way.

The second-gen Nest uses different algorithms based on the type of system your home uses.
Lindsey Turrentine/CNET

One of my favorite Nest features, besides being able to control my thermostat from anywhere, including my office and my bed, is the Auto Away feature. Because the thermostat senses motion around itself, it automatically shuts down your heating or cooling when you're away. The first-generation device took about 2 hours to declare you "away," but the new Nest learns your family's patterns more precisely. In my tests, Auto Away does now predict absences faster, and I've been saving more energy year-over-year as a result since my family predictably leaves the house every day. The version 3.5 software update now predicts how long you'll be gone, too, so it can start heating or cooling before you return -- a welcome change in my book if it works, since this winter I found myself frequently returning to a colder-than-I'd-like house.